BlackRock's Rieder differs from 'consensus' on future U.S. rates

FILE PHOTO: A sign for BlackRock Inc hangs above their building in New York U.S., July 16, 2018. REUTERS/Lucas Jackson

(Reuters) - Top BlackRock Inc (BLK.N) bond investor Rick Rieder said on Wednesday the U.S. Federal Reserve will raise rates only twice “or so” in 2019, countering what he called an “excessive” expectation by investors.

The Fed has been raising rates to stave off inflation and end its historic measures to counter the 2007-2009 global financial crisis.

Rieder, however, said the Fed could be constrained in tightening monetary policy by trade conflicts, global economic conditions and trends in technology that have tamped down on factors that would otherwise push inflation higher.

“So, in our view, the Fed will probably only tighten a couple of times, or so, next year, versus the consensus expectation of three or four hikes in 2019, which we think could be excessive,” he said.

In addition to managing several funds, Rieder is chief investment officer of global fixed income at BlackRock, which manages $6.3 trillion in assets, with nearly a third of that in fixed income.

Rieder’s remarks came in an emailed note after the Fed raised rates, as expected, on Wednesday but also forecast another rate hike in December, three more next year, and one increase in 2020.